Citation Nr: 0124990
Decision Date: 10/19/01 Archive Date: 10/23/01
DOCKET NO. 00-24 286A ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office and Insurance
Center in Philadelphia, Pennsylvania
THE ISSUE
Entitlement to the proceeds of the veteran's National Service
Life Insurance policy.
WITNESS AT HEARING ON APPEAL
Appellant
ATTORNEY FOR THE BOARD
M.S. Lane, Associate Counsel
INTRODUCTION
The veteran served on active duty from April 1951 to April
1953. He died in September 1997. The appellant is the
veteran's niece. As will be discussed below, this is a
contested claim.
This matter comes before the Board of Veterans' Appeals
(Board) on appeal of decisions of the Department of Veterans
Affairs (VA) Regional Office and Insurance Center in
Philadelphia, Pennsylvania (ROIC), which found that the
appellant was not a valid beneficiary of the veteran's
National Service Life Insurance (NSLI) policy. In that
decision, the ROIC also determined that the veteran's
daughter was the sole valid beneficiary of his NSLI policy.
Thereafter, the appellant perfected a timely appeal regarding
the adverse decision. During the pendency of this appeal,
the veteran's claims and insurance folders were temporarily
transferred to the Regional Office (RO) in Montgomery,
Alabama.
In April 2001, the appellant presented testimony at a
personal hearing before the undersigned Member of the Board
at the RO in Montgomery. A transcript of this hearing has
been obtained and associated with the record. During this
hearing, she submitted additional documentary evidence, which
was accompanied by a waiver of initial consideration by the
ROIC. This evidence has also been associated with the
record.
Following completion of the appellant's personal hearing,
this case was forwarded to the Board for appellate review.
After reviewing the record, the Board determined that the
veteran's daughter had not been provided with the opportunity
to appear at the appellant's hearing, as required by
38 C.F.R. § 20.713 (2000). In addition, the Board also
determined that the daughter had not been provided with a
copy of the appellant's Substantive Appeal, as required
38 C.F.R. § 19.102 (2001). For these reasons, the Board
issued a letter to the daughter in July 2001, which was
accompanied by a copy of the hearing transcript and a copy of
the appellant's Substantive Appeal. In this letter, the
Board advised the daughter that she was being given a period
of 60 days to review these documents, and to present
additional evidence and/or argument in response.
Thereafter, in September 2001, the Board received a packet of
documents from the daughter, which were not accompanied by a
waiver of RO consideration under 38 C.F.R. § 20.1304(d)
(2001). In simultaneously contested claims, if pertinent
evidence which directly affects payment, or potential
payment, of the benefit sought is submitted by any claimant
and is accepted by the Board under the provisions of this
section, the substance of such evidence will be mailed to
each of the other claimants, who will then have 60 days from
the date of mailing of notice of the new evidence in which to
comment upon it and/or submit additional evidence in
rebuttal. However, as will be discussed in greater detail
below, the Board believes that the evidence of record is
sufficient to warrant a grant of the appellant's claim of
entitlement to the proceeds of the veteran's NSLI policy.
Thus, the Board finds that referral of such evidence to the
appellant pursuant to 38 C.F.R. § 20.1304(d) is unnecessary.
Furthermore, because that evidence, as discussed below, is
not a determinative factor in the outcome of this decision,
we find that the appellant will not be prejudiced by the
Board's failure to provide her with an opportunity to respond
to the evidence submitted by the veteran's daughter. See
Bernard v. Brown, 4 Vet. App. 384 (1993).
FINDINGS OF FACT
1. At the time of his death in September 1997, the veteran
had in force an NSLI policy in the face amount of $10,000.00.
2. A change or designation of beneficiary form was signed by
the veteran on March 12, 1957, and received by the VAROIC
later that month. This form identifies one the veteran's
sisters as the sole principal beneficiary on the policy; the
veteran's daughter is identified as the sole contingent
beneficiary.
3. A designation of beneficiary form was signed by the
veteran on June 16, 1997, and received by the VAROIC later
that month. This form identifies the appellant, the
veteran's niece, as the sole principal beneficiary on the
policy.
4. The veteran's daughter, who is challenging the validity
of the June 1997 beneficiary designation for his NSLI policy,
has not shown by a preponderance of the evidence that the
veteran lacked testamentary capacity when he signed the form.
5. The veteran's daughter has not shown that the veteran was
subject to undue influence at the time of the June 1997
change in beneficiary.
CONCLUSION OF LAW
The appellant is the beneficiary of the veteran's National
Service Life Insurance policy. 38 U.S.C.A. § 1917 (West
1991); 38 C.F.R. §§ 3.355, 8.19 (2001).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
I. Factual Background
The record reflects that the veteran applied for and obtained
a NSLI policy in the face amount of $10,000 in 1951. In a
change of beneficiary form, VA Form 9-336, received in
September 1954, the veteran named his wife as the sole
principal beneficiary on the policy. He named one if his
sisters, E., as the sole contingent beneficiary.
In another change of beneficiary form received in March 1957,
the veteran named his sister, E., as the sole principal
beneficiary on the policy. He named his daughter as the sole
contingent beneficiary.
Medical records dated throughout the next decades show that
the veteran suffered from severe mental illness. For
example, the record shows that, in April 1962, the veteran
was admitted to a VA hosbvpital and found to suffer from
schizophrenia, paranoid type. Examination revealed that his
mental grasp, insight, and judgment were very poor. The
examining physician concluded that the veteran was definitely
psychotic, and that he appeared to be incompetent as well.
Similarly, admission to a VA hospital in May 1963 resulted in
a diagnosis of chronic paranoid schizophrenia. At that time,
examination revealed that he was only partially oriented, and
that he was generally confused and uncommunicative. It was
noted that he was actively hallucinating, and that he had
marked flight of ideas and looseness of association. It was
also noted that he had been previously released from the
hospital in October 1962, but that he had been released after
recommendations for a long-term hospitalization were
unsuccessful. On this occasion, the veteran remained
hospitalized until July 1964, at which time he was found to
be improved. Upon discharge, it was noted that he was
competent and able to work.
Subsequent medical records show that he continued to receive
periodic treatment for his mental illness throughout the next
several years. Although he appears to have remained
unemployed during that time, it appears that he was found to
be competent to handle VA funds on numerous occasions, by VA
physicians. There is no pertinent medical evidence of record
from the 1970's or 1980's.
VA medical records show that, in August 1996, the veteran was
admitted to the hospital. It was noted that he had a long
history of schizoaffective disorder, and that he had recently
been noncompliant with his medications. It was also noted
that he had been experiencing acute decompensation related to
behavior of hyperactivity, not sleeping, poor activities of
daily living, and grandiose thinking of a religious nature.
Upon examination, he was found to be alert and oriented times
three, with poor insight but fair judgment. Cognitive
testing revealed mild to moderate deficits in short-term and
long-term memory, but that he was able to do simple command
tasks. The examining physician noted a diagnosis of
schizoaffective disorder, and concluded that the veteran was
not competent to handle VA funds. The physician indicated
that discharge planning had been done with the veteran's
daughter and with his sister, E., who was described as his
main caretaker.
In January 1997, the veteran was again admitted to a VA
hospital. It was noted that he had been preaching to
strangers, and that he appeared irritable. It was also noted
that he was not sleeping. The examining physician found that
his thought content had been related to religious beliefs,
and that he believed that he had been "a 'child-man' born,
direct descendant from God". It was noted that he was alert
and oriented times three, and that he was at times unable to
follow conversation since all of his conversation would
relate to religious content. The physician concluded that he
was experiencing persecutory ideas, and that he had poor
insight and judgment. The physician noted a diagnosis of
schizoaffective disorder in acute decompensation. The
physician found that he was not competent to handle VA funds.
The veteran was released from the hospital approximately
seven weeks later.
During the veteran's hospitalization from January 1997
through February 1997, he underwent a VA aid and attendance
examination. The VA examiner noted that the veteran had over
a 40-year history of psychiatric treatment, and that he had
three hospital admissions within the past year. It was noted
that he had presented at this admission in a manic, psychotic
state, and that he was hostile, uncooperative, not sleeping,
and experiencing grandiose illusions with excessive
religiosity. It was also noted that he had been paranoid in
thinking that people were talking about him, and that he was
engaging strangers on the street in conversations about his
delusions. The VA physician concluded that he had probably
not been compliant with his medications, because he had been
living with an 81-year-old sister who had Alzheimer's
disease. The VA examiner noted that a niece of his was
apparently coming to live with him. The VA examiner
determined that the veteran required supervision for
medication compliance, and that he was unable to manage the
activities of daily living by himself.
In an April 1997 rating decision, the RO proposed to find
that the veteran was incompetent and unable to handle funds.
This action was implemented in a July 1997 rating decision.
On June 5, 1997, the ROIC issued an annual insurance policy
statement to the veteran. In this statement, the ROIC
advised the veteran that his last beneficiary designation was
made prior to 1959, and that it was important to have an up-
to-date beneficiary designation.
On June 12, 1997, the veteran was examined by a VA physician
after complaining of weakness and other physical symptoms,
which were believed to be due to medicine-induced Parkinson's
disease. A history of schizoaffective disorder was noted.
During neurological examination, it was observed that he was
alert and oriented to person only.
Later that month, the ROIC received a change of beneficiary
form, which was apparently signed by the veteran on June 16,
1997. This form identifies the appellant as the sole
principal beneficiary of his NSLI policy. No contingent
beneficiaries were named. (The Board notes that the
signature on this form appears to have been written in very
shaky handwriting, and is quite difficult to read. However,
the signature is legible enough to be identified as matching
the veteran's name. As to whether the author of this
signature was actually the veteran, the Board will address
that issue in the Analysis section of this decision.)
On June 21, 1997, the veteran was readmitted to the VA
hospital with complaints of increased confusion, and gait
disturbance with bowel and bladder incontinence. It was
noted that he had a history of schizophrenia, and that he had
been seen in the emergency room one week before for similar
problems. The veteran apparently remained hospitalized until
his death in September 1997.
In a statement dated in August 1997, the veteran's daughter
indicated that she had been given power of attorney over the
veteran's affairs. She reported that her father had been
hospitalized since June 1997, and that he was going to go to
a nursing home upon his release. She asserted that her
cousin (the appellant herein) had been staying in the
veteran's house and had been cashing his checks. The
daughter indicated that she wished to act as her father's
guardian with respect to matters involving VA, and that she
also wished to change the beneficiary on his insurance
policy. With this statement, she attached a document
entitled "Durable Power of Attorney", which indicates that
the veteran was granting power of attorney in favor of his
daughter. At the end of this document, the veteran
apparently made a mark, rather than signing his name.
In a second statement, submitted in September 1997, the
veteran's daughter asserted that she had reason to believe
that fraud had been involved in the designation of her cousin
as the beneficiary of her father's NSLI policy in June 1997.
She contended that the veteran's signature must have been
forged in the designation, as he was unable to write his own
signature due to medicine-induced Parkinson's disease.
Later in September 1997, the veteran died. The certificate
of death lists the immediate cause of death as aspiration
pneumonia. An underlying cause of death was noted to be
cerebrovascular accident.
In a report of contact dated in October 1997, it was reported
that, upon inquiring of the VAROIC by telephone, the
appellant was advised that she was listed as beneficiary of
the veteran's NSLI policy in the most recent change of
beneficiary form of record. She was further informed,
however, that this was being protested by the veteran's
daughter, and that payment would be delayed until the
situation was resolved. The appellant reported that she had
been taking care of the veteran for ten years, and that his
daughter had not had much to do with him during that time.
She asserted that she had been made the beneficiary of his
NSLI account to replace her mother, who would have been
listed as sole principal beneficiary, but who had recently
died.
The record reflects that the June 1997 designation was
forwarded by the ROIC in March 1998 to a the forensic
laboratory of the Office of Inspector General of the
Department of Veterans Affairs, in order to determine if the
signature contained on the form had been written by the
veteran. In a response memorandum received in April 1998,
the director of the laboratory indicated that the signature
on the designation had been compared to signatures of the
veteran that had been written on 19 other documents contained
in his VA claims folder. The results of the forensic
examination were reported to be such that that the veteran
could neither be identified nor eliminated as the author of
the signature contained in the designation.
In May 1998, the RO advised both the appellant and the
daughter of the results of the laboratory findings. The
daughter was given a period of 30 days in which to respond.
She was advised by the RO that she should explain exactly why
she believed her father's designation to be invalid.
Later that month, the RO received a letter from a private
attorney, who indicated that she was writing on behalf of the
estate of the veteran. Specifically, the attorney explained
that she was representing the veteran's nephew, who had been
appointed as the Administrator of the estate. The attorney
argued that the veteran was "less than competent" at the
time that he completed the June 1997 designation, and that
the appellant might have exercised undue influence over the
veteran by forcing him to sign the document. The attorney
also argued that the appellant might have forged the
veteran's signature. In support of these arguments, the
attorney noted that the appellant had been the veteran's
caretaker prior to his death, and that "there are some
allegations that he was undernourished or neglected by her".
In a letter dated in July 1998, the private attorney again
asserted that the appellant had exerted undue influence over
the veteran by forcing him to change the beneficiary of his
NSLI policy. The attorney found it noteworthy that, when the
June 1997 designation was complete, neither of the veteran's
two living daughters was listed anywhere on the form, even as
contingent beneficiaries.
In September 1998, the RO issued a letter to M., who had
signed his name as a witness on the June 1997 designation.
The RO requested that he answer a number of questions
regarding the circumstances surrounding the veteran's
signing. In a response letter received the following month,
M. indicated that he was a friend of the veteran and the
appellant, and that he had been asked by the appellant to
witness the designation. He reported that he was not aware
of who completed the form for the veteran to sign. He stated
that he had seen the insured (the veteran) sign the form. M.
also reported that, in his opinion, the veteran was alert and
lucid as to his surroundings and the people around him, and
that he was clear as to the person he named as beneficiary.
In response to a question regarding whether the veteran
appeared to be acting of his own free will or at the
direction of another, M. indicated that he did not know. He
also indicated that he did not know why the veteran chose to
make the change.
In November 1999, the RO subsequently received a statement
from Dr. C., who was one of the psychiatrists who had
examined the veteran during his August 1996 hospitalization,
and during his hospitalization from January 1997 to February
1997. She indicated that he had been found to be incapable
of managing his VA funds during both of these admissions.
She further indicated, however, that she could not make any
assessment as to his capacity to execute a valid beneficiary
designation on another date. Dr. C. determined that she
could only attest that, during his hospitalizations, he was
deemed incapable of handling funds. She noted, however, that
this assessment includes much different information that what
would be gathered for determining his ability to designate a
beneficiary.
In April 2000, the RO concluded that the appellant was not a
valid beneficiary of the veteran's National Service Life
Insurance policy. In reaching this determination, the RO
found that the veteran lacked testamentary capacity when he
signed the June 1997 designation. As a consequence of this
determination, the RO also found that the veteran's daughter
was the sole valid living beneficiary of his NSLI policy,
based upon the 1957 designation. Both parties were advised
of this decision in April 2000 letters.
The following month, the appellant submitted a Notice of
Disagreement regarding the RO's decision. In response, the
RO issued Statements of the Case to both parties, which set
forth the various laws and regulations pertinent to this
case. Thereafter, in December 2000, the appellant submitted
a Substantive Appeal (on VA Form 9), in which she indicated
that she was working as a LPN (licensed practical nurse), and
that she had worked in mental health for four years. She
indicated that she believed that the veteran was very much
aware of what he was doing when he signed the June 1997
designation. She reported that she had taken care of the
veteran during the last years of his life, and that his
daughter had hardly had any contact with him.
During her April 2001 hearing, the appellant reasserted that
she had taken care of the veteran during the last years of
his life. She stated that she had moved in with another
relative, an aunt, around 1988, but that she did spend a
great deal of time that year going to help the veteran at his
residence. When that other relative died in 1988, she then
apparently moved in with her mother and the veteran at her
"family house", and stayed with them until October 1996.
She then reportedly moved to Georgia for three months, and
the veteran was left with her mother. She indicated that her
mother then became ill in early 1997, so she returned and
helped care for the veteran until his last hospitalization.
The appellant testified that, during one of the veteran's
hospitalizations, she had been told that his daughter had
shown up, but that she later discovered that this was a
cousin pretending to be the daughter. The appellant also
testified that it was the veteran who picked M. to stand as
witness to his signature, because they were "hanging out"
as friends at the time. During this hearing, testimony was
also provided by T., who is the appellant's sister.
T. essentially reiterated the appellant's testimony that the
appellant was the veteran's sole caregiver prior to his
death.
During her personal hearing, the appellant submitted a
statement signed by two individuals, who identified
themselves as a married couple, and as neighbors of the
appellant's family since 1963. They indicated that they were
aware of the care given to the veteran by the appellant, and
that they believe that it was his wish that the appellant be
the beneficiary of his policy. They stated that they knew
that the veteran had children, but that he never spoke of
them and they rarely came to visit.
As noted in the Introduction section above, the Board
subsequently determined that the veteran's daughter had not
been provided with the opportunity to appear at the
appellant's hearing, as required by regulations. The Board
also determined that the daughter had not been provided with
a copy of the appellant's Substantive Appeal, as required by
regulations. The Board therefore issued a letter to her,
which was accompanied by a copy of the hearing transcript and
a copy of the appellant's Substantive Appeal. In this
letter, the Board advised the daughter that she was being
given a period of 60 days to review these documents, and to
present additional evidence or argument in response.
In October 2001, the Board received a packet of documents
from the daughter. Among these documents was a statement
signed by daughter, in which she indicated that she had gone
to Alabama and offered to bring her father to stay with her
in Connecticut, but that he had told her not to bother
because it was only he and one of her aunts left, and he
wanted to stay there with her. She also asserted that the
appellant has no idea of her relationship with her father,
and that she was merely making assumptions. She further
indicated that she did come to see her father during his
final hospitalization, and that she was staying there for a
while because he was going to be released to a nursing home.
She noted that, unfortunately, he died before that could
happen.
Among these documents is a letter from G., who is another
sister of the appellant. G. indicated that it was her
mother, and not the appellant, who was the veteran's care
giver until becoming ill in January 1997. G. also indicated
that she had another sister who had died in February 1997,
and that the appellant had since purchased an automobile and
license plate in her dead sister's name. In support of this
assertion, she submitted a car registration, which was dated
in April 1997. This document is labeled with the deceased
sister's name and the appellant's mailing address. (The
Board notes in passing that the appellant's mailing address
is the same one that was identified as her "family house"
during her April 2001 hearing.) G. also made a similar
accusation with respect to her deceased sister's credit card,
in that she believes that the appellant had been using her
account since she died. G. submitted a copy of a credit card
statement, which shows that charges were made to the account
in March 1997 and April 1997. This statement is also labeled
with the deceased sister's name and the appellant's mailing
address. Several other documents and contracts of this
nature were also submitted, which are also labeled with the
deceased sister's name but are dated after her apparent death
in February 1997. G. reported that her mother, who had been
living with the appellant, had recently died. She noted that
she and the appellant had tried to see her mother in February
1998, but that they were not allowed to by either the
appellant or T. She indicated that, after her mother died,
the appellant produced a living will that had not been
probated. This will was allegedly written in the appellant's
handwriting and had the mother's signature. It also
identified the beneficiaries as the appellant and T. A copy
of this will was included among these documents.
II. Legal Analysis
A. Preliminary Matters
At the outset, the Board notes that recently enacted
legislation, the Veterans Claims Assistance Act of 2000
(VCAA), Public Law No. 106-475, 114 Stat. 2096 (2000),
contains extensive provisions modifying procedures for the
adjudication of all pending claims. See generally Holliday
v. Principi, 14 Vet. App. 280 (2001); Karnas v. Derwinski, 1
Vet. App. 308 (1991). The new statute revises the former
section 5107(a) of title 38, United States Code, to eliminate
the requirement that a claimant come forward first with
evidence to well ground a claim before the Secretary of
Veterans Affairs is obligated to assist the claimant in
developing the facts pertinent to the claim. The Board notes
that the present matter has not been subject to the well-
grounded claim requirement, and thus those provisions of the
VCAA relating to the elimination of that requirement are
moot.
Other salient features of the VCAA are paraphrased below, and
impose the following obligations upon the Secretary:
(1) The Secretary must provide application forms and
notify the claimant and the representative, if any,
if the application is incomplete, of the information
necessary to complete the application. 38 U.S.C.A. §
5102 (West Supp. 2001).
(2) The Secretary must provide the claimant and the
claimant's representative, if any, with notice of
required information and evidence not previously
provided that is necessary to substantiate the claim.
38 U.S.C.A. § 5103(a) (West Supp. 2001).
(3) The Secretary must indicate which part of the
information and evidence, if any, is to be provided
by the claimant and which portion, if any, the
Secretary will attempt to obtain on behalf of the
claimant. 38 U.S.C.A. § 5103(a) (West Supp. 2001).
(4) The Secretary must make reasonable efforts to
assist the claimant in obtaining evidence necessary
to substantiate the claim for the benefit sought,
unless no reasonable possibility exists that such
assistance would aid in substantiating the claim. 38
U.S.C.A. § 5103A(a) (West Supp. 2001).
(5) The Secretary must make every reasonable effort
to obtain relevant records (including private
records) that the claimant adequately identifies to
the Secretary and authorizes the Secretary to obtain.
38 U.S.C.A. § 5103A(b)(1) (West Supp. 2001).
(6) If, after making reasonable efforts to obtain
relevant records, the Secretary is unable to obtain
the relevant records sought, the Secretary shall
notify the claimant that the Secretary is unable to
obtain records, and such notification shall:
(a) identify the records the Secretary is unable
to obtain;
(b) briefly explain the efforts that the Secretary
made to obtain those
records; and
(c) describe any further action to be taken by the
Secretary with
respect to the claim. 38 U.S.C.A. §
5103A(b)(2) (West Supp.
2001).
(7) Whenever the Secretary attempts to obtain
records from a Federal department or agency,
the efforts to obtain those records shall
continue until the records are obtained
unless it is reasonably certain that such
records do not exist or that further efforts
to obtain those records would be futile. 38
U.S.C.A. § 5103A(b)(3) (West Supp. 2001).
. . . . .
(10) Nothing in the new statute shall be construed as
precluding the Secretary from providing such other
assistance to a claimant in substantiating a claim as
the Secretary considers appropriate. 38 U.S.C.A. §
5103A(g) (West Supp. 2001).
(11) Except as otherwise provided by law, a claimant
has the responsibility to present and support a claim
for benefits under laws administered by the
Secretary. 38 U.S.C.A. § 5107(a) (West Supp. 2001).
In addition, VA has recently published new regulations, which
were created for the purpose of implementing many of the
provisions of the VCAA. See 66 Fed. Reg. 45,620 (Aug. 29,
2001) (to be codified as amended at 38 C.F.R. §§ 3.102,
3.156(a), 3.159, and 3.326(a)). The intended effect of these
regulations is to establish clear guidelines consistent with
the intent of Congress regarding the timing and scope of
assistance VA will provide a claimant who files a
substantially complete application for VA benefits. These
new regulations also provide guidelines regarding VA's duties
to notify claimants of necessary information or evidence and
to assist claimants in obtaining evidence. These new
regulations, which in pertinent part are effective as of the
date of enactment of the VCAA, interpret and implement the
mandates of the statute, "and do not provide any rights
other than those provided by the VCAA." 66 Fed. Reg.
45,629.
The Board notes that this case involves two separate parties,
both of whom may considered claimants for the purposes of the
VCAA: the appellant and the veteran's daughter. Having
reviewed the complete record, the Board finds that the
requirements of the VCAA and the implementing regulations
have been satisfied in this matter with respect to both the
appellant and the daughter. The RO, in the Statements of the
Case issued in November 2000, has set forth the law and facts
in a fashion that clearly and adequately informed both of the
claimants of the very limited and specific type of evidence
needed to substantiate their claims. Neither the appellant
nor the daughter has made reference to any additional records
or other evidence which would tend to support their
respective claims. It appears clear, therefore, that there
are no outstanding records or other evidence that has not
already been identified and associated with the record.
As discussed in the Introduction section of this decision,
although the veteran's daughter was not provided the
opportunity to appear at the appellant's personal hearing,
she was later provided a copy of the transcript and was given
an opportunity for a hearing of her own, and to present
additional evidence in support of her position. Given the
circumstances of this matter, the Board cannot find any basis
under the VCAA to defer adjudication. Moreover, it appears
equally clear that the implementing regulations which were
recently issued under the VCAA do not change the picture in
this matter, since they affect only VA notice and development
procedures, and not the underlying substantive law relevant
to this insurance case.
Accordingly, the Board finds that we may proceed to decide
this matter without prejudice to either claimant. See
Bernard v. Brown, 4 Vet. App. 384 (1993). Moreover, we find
that VA has satisfied its duty to assist both parties in
apprising them as to the evidence needed, and in obtaining
evidence pertaining to their claims, under both former law
and the new VCAA. 38 U.S.C.A. § 5107(a) (1991); 38 U.S.C.A.
§§ 5103, 5103A (West Supp. 2001). The Board therefore finds
that no useful purpose would be served in remanding this
matter for yet more development. Such a remand would result
in unnecessarily imposing additional burdens on VA, with no
benefit flowing to the appellant or the contesting claimant.
The Court of Appeals for Veterans Claims has held that such
remands are to be avoided. See Winters v. West, 12 Vet. App.
203 (1999) (en banc), vacated on other grounds sub nom.
Winters v. Gober, 219 F.3d 1375 (Fed. Cir. 2000); Soyini v.
Derwinski, 1 Vet. App. 540, 546 (1991); Sabonis v. Brown, 6
Vet. App. 426, 430 (1994). In fact, the Court recently
stated, "The VCAA is a reason to remand many, many claims,
but it is not an excuse to remand all claims." Livesay v.
Principi, ___ Vet. App. ___, No. 00-51 (Aug. 30, 2001).
B. Discussion
The appellant is seeking entitlement to the proceeds of the
veteran's NSLI policy. She essentially contends that she was
made the sole principal beneficiary by virtue of the June
1997 change of beneficiary form. As discussed in detail
above, the RO has determined that she is not a valid
beneficiary of the veteran's NSLI policy. Instead, the RO
concluded that the veteran's daughter, the contesting
claimant herein, was the proper beneficiary, based upon a
March 1957 designation on which she was named contingent
beneficiary. The RO based this conclusion upon a finding
that the veteran lacked testamentary capacity when he signed
the June 1997 designation.
1. Beneficiary designations in general
An NSLI policy is a contract between the veteran and the
Federal Government which assigns legally binding duties and
responsibilities to each party. The veteran, as the insured
party, possesses the right to designate the beneficiary or
beneficiaries of the policy, and at all times enjoys the
right to change the beneficiary or beneficiaries without the
consent of such beneficiary or beneficiaries. A change of
beneficiary to be effective must be made by notice in writing
signed by the insured and forwarded to VA by the insured or
the insured's designated agent, and must contain sufficient
information to identify the insured. 38 U.S.C.A. § 1917; 38
C.F.R. § 8.19. Thus, the Federal statute governing NSLI
policies gives the veteran the right to change the
beneficiary of an NSLI policy at any time, with or without
the knowledge or consent of any present or prior
beneficiaries. See Wissner v. Wissner, 338 U.S. 655, 658
(1950); Young v. Derwinski, 2 Vet. App. 59 (1992).
As the insurer, the Federal Government promises to pay the
proceeds of the NSLI policy to whomsoever the veteran
designates as the beneficiary or beneficiaries of the policy
proceeds. Should questions arise regarding the proper
beneficiaries of NSLI policies, Federal law rather than state
law governs. Elias v. Brown, 10 Vet. App. 259, 262-63 (1997)
(citing United States v. Donall, 466 F.2d 1246, 1247 (6th
Cir. 1972)); see also Wolfe v. Gober, 11 Vet. App. 1 (1997).
Attempts by a veteran to change beneficiaries are liberally
construed by reviewing courts so as to effectuate the
veteran's intent, with a two-prong test being used to
determine whether an actual change of beneficiaries has taken
place. First, there must be evidence of an intention on the
part of the veteran to change the beneficiary, and second,
there must be some overt act done to effectuate that intent.
Hammack v. Hammack, 359 F.2d 844 (5th Cir. 1966); Jones v.
Brown, 6 Vet. App. 388, 390 (1994); Curtis v. West, 11 Vet.
App. 129, 133 (1998).
Assuming the above criteria are met, a change of beneficiary
designation may nonetheless be invalid, if it is determined
that the insured lacked "testamentary capacity" at the time
of the disputed change of beneficiary. When cases are
referred to a rating agency involving the testamentary
capacity of the insured to execute designations or changes of
beneficiary, or designations or changes of option, the
following considerations will apply:
(a) Testamentary capacity is that degree of
mental capacity necessary to enable a person
to perform a testamentary act. This, in
general, requires that the testator
reasonably comprehend the nature and
significance of his act, that is, the subject
and extent of his disposition, recognition of
the object of his bounty, and appreciation of
the consequence of his act, uninfluenced by
any material delusion as to the property or
persons involved.
(b) Due consideration should be given to all
facts of record, with emphasis being placed
on those facts bearing upon the mental
condition of the testator (insured) at the
time or nearest the time he executed the
designation or change. In this connection,
consideration should be given to lay as well
as medical evidence.
(c) Lack of testamentary capacity should not
be confused with insanity or mental
incompetence. An insane person might have a
lucid interval during which he would possess
testamentary capacity. On the other hand, a
sane person might suffer a temporary mental
aberration during which he would not possess
testamentary capacity. There is a general
but rebuttable presumption that every
testator possesses testamentary capacity.
Therefore, reasonable doubts should be
resolved in favor of testamentary capacity.
38 C.F.R. § 3.355.
The burden of proving lack of testamentary capacity lies with
the person so contesting. Morris v. States, 217 F. Supp. 220
(N.D. Tex. 1963). To rebut the presumption of testamentary
capacity established by section 3.355(c), the contestant must
show a lack of testamentary capacity by a preponderance of
the evidence. Elias v. Brown, 10 Vet. App. 259, 263 (1997).
The law also provides that a beneficiary designation may be
invalid if there is undue influence placed upon an insured to
change the beneficiary of his policy. Generally, "undue
influence" which will nullify a change of beneficiary is
that influence or dominion, as exercised at the time and
under the facts and circumstances of the case, which destroys
the free agency of the testator, and substitutes, in the
place thereof, the will of another. Lyle v. Bentley, 406 F.
2d 325 (5th Cir. 1969), citing Long v. Long, 125 S.W. 2d 1034
(Tex. 1939). Before a testament can be set aside on the
grounds of undue influence, the contestant must prove (1) the
existence and exertion of an influence; (2) the effect and
operation of such influence so as to subvert or overpower the
mind of the testator at the time of the execution of the
testament; and (3) the execution of the testament which the
maker thereof would not have executed except for such
influence. Lyle v. Bentley, supra. The Lyle case also dealt
with the issue of who was the rightful beneficiary of a NSLI
policy.
In this case, the burden for showing that the June 1997
designation is invalid rests upon the veteran's daughter, as
she is the party contesting its validity. The Board notes
that the daughter has set forth three arguments in support of
her claim that the June 1997 designation in favor of the
appellant is not valid. First, she has asserted that the
appellant forged the veteran's signature, and that the change
of beneficiary therefore fails to meet the basic criteria set
forth in 38 C.F.R. § 8.19. Second, she argues that the
veteran lacked testamentary capacity, and was therefore
unable to effectuate the change in beneficiary. As noted
above, the ROIC agreed with this argument in the April 2000
decision, and determined that the June 1997 designation was
invalid on that basis. Last, the daughter argues that the
appellant exercised undue influence over the veteran by
forcing him to change the beneficiary of his NSLI policy.
2. Validity of veteran's signature
With respect to the daughter's first argument, the Board
notes that Congress has provided that a veteran has the
absolute right, subject to certain regulatory criteria, to,
at any time, change the beneficiary without the consent or
knowledge of a prior beneficiary. 38 U.S.C.A. § 1917(a); 38
C.F.R. § 8.19. The regulatory criteria, as cited above,
provide that for a change of beneficiary to be effective it
must be made in writing, signed by the insured, and forwarded
to VA by the insured or his agent. As noted above, the
daughter has argued that the veteran was physically unable to
write at the time the June 1997 designation was completed,
and that he therefore could not have been the author. In
support of this assertion, she has submitted a Durable Power
of Attorney form dated in August 1997, in which the veteran
made his mark, rather than signing his name.
Having reviewed the record, the Board believes that the
veteran properly complied with the regulatory criteria when
he executed the June 1997 designation. In this regard, the
Board notes that the signing of the designation was witnessed
by M., an individual who has described himself as a friend of
the veteran. There is no evidence of record suggesting that
M. has been untruthful in his statement or that he lacks
credibility, and the daughter has never made any such
assertions. Although the Board recognizes that M. has also
described himself as a friend of the appellant, we do not
believe that this fact, by itself, provides sufficient reason
to doubt M.'s statement that he witnessed the veteran sign
the designation. It is noteworthy that M's answers to the
questions posed by the ROIC were circumspect, in that he did
not comment upon who had completed the form before the
insured signed it, and offered no opinion as to the insured's
exercise of free will or his reasons for making the change; M
simply indicated that he did not know. In this regard, the
fact that M avoided engaging in speculation lends credibility
to his statements.
Furthermore, the Board notes that the beneficiary designation
document was forwarded by the RO in March 1998 to a the
forensic laboratory of VA's Office of Inspector General, in
order to determine whether the signature thereon in fact
belonged to the veteran. In a response memorandum received
in April 1998, the Director of the laboratory indicated that
the veteran could neither be identified nor eliminated as the
possible author of the signature contained in the
designation. Therefore, because there was a credible witness
present at the time the veteran signed the June 1997 form,
and because the results of laboratory studies failed to
contradict this testimony, the Board concludes that the
veteran did, in fact, sign the June 1997 designation.
The Board notes that the only evidence of record suggesting
that the veteran was not the author of the June 1997
signature is the assertion of his daughter that he was
physically unable to do so at that time due to Parkinson's
disease, and the later-executed Durable Power of Attorney
that she submitted in support of this assertion. However,
the Board notes that, although the veteran may have been
unable to sign his name in August 1997, this fact does not
prove that he was unable to do so in June 1997. The medical
evidence of record does show that the veteran's physical and
mental health deteriorated a great deal in the last several
months of his life, but that evidence does not show that his
physical health had deteriorated to such a degree by June
1997 that he would be completely unable to write his
signature at that time.
In fact, this evidence of deterioration could be consistent
with only a significant impairment in his ability to write in
June 1997, as demonstrated by the poor state of the signature
on the June 1997 designation, and the subsequent complete
loss of any ability to write in August 1997, as demonstrated
by the "mark" contained in the August 1997 document.
Therefore, in light of the absence of any competent medical
evidence showing that the veteran was completely unable to
write his name by June 16, 1997, the Board finds that the
daughter's mere assertion that the veteran was unable to
write at that time is insufficient to outweigh the testimony
of M., who witnessed the signing.
The Board does not doubt the sincerity of the daughter's
belief that the veteran was unable to render a signature.
However, she was not present at the signing of the document.
Moreover, she is not shown to be a medical professional, and
therefore cannot validly comment on a matter requiring
medical knowledge, such as the degree of impairment in the
veteran's ability to write at the specific time in issue.
See Routen v. Brown, 10 Vet. App. 183, 186 (1997) ("a
layperson is generally not capable of opining on matters
requiring medical knowledge"), aff'd sub nom. Routen v.
West, 142 F.3d 1434 (Fed. Cir. 1998), cert. denied, 119 S.
Ct. 404 (1998); Espiritu v. Derwinski, 2 Vet. App. 492
(1992); Moray v. Brown, 5 Vet. App. 211 (1993).
3. Testamentary capacity
The veteran's daughter has also asserted that the insured
lacked testamentary capacity to sign the June 1997
designation, and that the designation is therefore invalid on
that basis. However, after reviewing the record, the Board
finds that the medical evidence of record pertaining to the
veteran's mental disorder is not sufficient to rebut the
presumption, under the law, in favor of testamentary
capacity. We are cognizant that the ROIC decided otherwise,
and found that the June 1997 designation was invalid as a
result. However, with all due respect for the action taken
by the ROIC, the Board is of the opinion that the decision
was reached based upon an incorrect application of the
standard for determining testamentary capacity.
As noted above, the burden of proving lack of testamentary
capacity lies with the person challenging the insured's
capacity, which person in this case is the veteran's
daughter. See Morris, supra. To rebut the presumption of
testamentary capacity established by 38 C.F.R. § 3.355(c),
she must show a lack of testamentary capacity by a
preponderance of the evidence. See Elias, supra. In support
of her contention that the veteran did not possess
testamentary capacity when he designated the appellant as his
sole beneficiary, the daughter has pointed primarily to the
veteran's medical records, which show that he had a long
history of severe mental illness, as well as several
hospitalizations in the weeks surrounding the designation.
She essentially contends that, because of the severe nature
of the veteran's schizophrenia, he could not have been aware
of his actions when he designated the appellant as his
beneficiary.
The Board is of the opinion that the appellant has confused
the issues of insanity and/or mental incompetence with the
issue of testamentary capacity. As noted above, the
regulations specifically contemplate that even an insane
person might have a lucid interval during which he would
possess testamentary capacity, or that a sane person might
suffer a temporary mental aberration during which he would
not possess testamentary capacity. 38 C.F.R. § 3.355(c).
This is why the regulations create a rebuttable presumption
that every testator possesses testamentary capacity, and that
any reasonable doubt as to that issue should be resolved in
favor of testamentary capacity. Thus, the Board believes
that it is not sufficient to show that the veteran
experienced a severe mental disorder, or that he was
incompetent in some respects. Rather, the person assailing
testimentary capacity must demonstrate that, at the precise
time that he completed the designation, the testator did not
comprehend the nature and significance of his act. 38 C.F.R.
§ 3.355(a).
In this case, the record does indeed demonstrate that the
veteran suffered from severe schizoaffective disorder
throughout much of his life, and that he was experiencing
active symptoms of this disease in the weeks immediately
prior to and following the day on which he designated the
appellant as his beneficiary. In addition, the record also
shows that he was specifically found by a VA examiner to be
alert and oriented to person only, and not to time or place,
on June 12, 1997, and on June 21, 1997. Moreover, shortly
after his admission on June 21, he was unable to undergo a
barium swallow test because of his decreased level of
understanding with respect to compliance with the procedure.
Thus, it is clear from the aforementioned evidence that the
veteran was experiencing severe mental impairment during this
period as a result of his schizoaffective disorder. However,
while this evidence does provide strong insight into the
veteran's overall mental health, it does not address the
question of whether the veteran might have experienced a
lucid interval during which he possessed sufficient capacity
to designate the appellant as his beneficiary. In this
regard, the Board notes that the only evidence of record
pertaining to the veteran's mental state on the day of the
designation (other than the testimony of the appellant, who
was also present) is the reply to the ROIC's questions by M.,
who indicated that the veteran appeared to be alert and lucid
as to his surroundings and the people around him, and that he
was clear as to the person he named as his beneficiary.
Although there is no evidence indicating that M. has any
medical training or that he possesses special knowledge
regarding mental health, see Routen, supra, the Board notes
that the provisions of 38 C.F.R. § 3.355 specifically provide
that consideration will be given to lay evidence, and that
emphasis should be placed on those facts bearing upon the
mental condition of the testator (the insured) at the time or
nearest the time that the insured executed the designation or
change. Therefore, in light of M.'s presence at the signing
of the designation, the Board believes his testimony to be
the most probative evidence of record regarding the state of
the veteran's mental condition on the precise day that he
signed the change of beneficiary form, to the extent that the
law permits such a determination to be made by a layman.
Furthermore, the Board notes that the veteran's treatment
records from the period of January 1997 to June 1997 appear
to confirm that, despite suffering from severe mental health
problems, the veteran's schizoaffective disorder was not so
severe as to completely impair his ability in comprehending
the nature of his surroundings at all times. For example,
the Board notes that the February 1997 Discharge Summary
shows that, upon admission, he was exhibiting hyper-religious
delusions, but that he was also found to be alert and
oriented times three. A mental health note dated on January
13, 1997, indicates that, although the veteran was continuing
to exhibit a fixed belief that he was a Saint, he was also
cooperative and goal-directed upon examination. The
psychiatrist noted that he had minimal insight and fair
judgment. Shortly thereafter, in a nursing note dated
January 15, 1997, a nurse indicated that the veteran had been
cooperative and was able to socialize well with the staff and
fellow veterans. Thus, although the veteran obviously
suffered from delusions and other severe symptoms during his
hospitalization from January 1997 to February 1997, he also
clearly experienced periods in which he was lucid enough to
recognize others and to comprehend his situation.
Similarly, the Board notes that the veteran was subsequently
examined by a VA physician on June 6, 1997, after
experiencing left-sided weakness. The VA physician noted
that he was alert and cooperative during the examination.
Later that month, on June 21, 1997, he was readmitted to the
hospital. Although one clinical note dated on June 21, 1997,
does show that he was alert only to person, the discharge
summary from that hospitalizations shows that he was found to
be alert and oriented times three at admission on that same
day. His speech was found to be mildly pervasive but clear,
and although he exhibited some tangential speech, his naming
and repetition were found to be intact. Also, in a clinical
note dated on June 22, 1997, a VA physician determined that,
although the veteran was experiencing a slight worsening of
his schizoaffective disorder, he was alert and oriented times
three. In addition, on June 23, 1997, he exhibited some
tangential speech, but was again found to be alert and
oriented times three. Similar findings were reported during
the following two days, until he experienced a seizure on
June 27 due to an intraventricular hemorrhage. Thus, the
medical evidence of record from June 1997 confirms that the
veteran did routinely experience periods during that month in
which he was lucid enough to recognize others and to
comprehend his situation.
In light of the aforementioned evidence, the Board finds that
the veteran's medical records do not show that he lacked
testamentary capacity at the time that he completed the June
1997 designation. Although the Board recognizes the severe
nature of his symptoms, as well as the fact that he was
specifically found to be incompetent by several VA physicians
during this period, we note that these facts are not
sufficient to show that he lacked testamentary capacity when
he signed the June 1997 designation. As discussed in detail
above, the veteran's medical records demonstrate that he
routinely experienced prolonged moments of lucidity, in which
he was able to reasonably comprehend the nature of his
situation and the significance of his acts.
Under these circumstances, the Board cannot find that the
veteran's mental disorder and sporadic incompetency
constitute sufficient evidence of a lack of testamentary
capacity on the day that he signed the designation. Instead,
the Board finds the most probative evidence in that regard to
be the testimony of M., who indicated that the veteran
appeared to be alert and lucid as to his surroundings and the
people around him, and that he was clear as to the person he
named as beneficiary. As discussed above, M.'s testimony is
consistent with the medical evidence of record, which
confirms that the veteran was capable of experiencing such
moments. Moreover, M.'s testimony is the only disinterested
evidence of record pertaining to the veteran's mental state
at the precise moment that he completed the June 1997
designation.
The Board notes, in passing, that our conclusions regarding
the significance of the veteran's medical records appear to
be consistent with the comments of Dr. C., in her November
1999 letter. Although Dr. C. acknowledged that the veteran
had been found to be incompetent to handle his VA funds
during his hospitalization from January 1997 to February
1997, she also indicated that she was unable to make any
assessment as to his capacity to execute a valid beneficiary
designation on another date. Furthermore, she explained that
the assessment for determining whether a person was
incompetent to handle VA funds would be based upon different
information that what would be needed for determining if that
person was capable of designating a beneficiary. The Board
is of the opinion that Dr. C.'s comments are consistent with
our own conclusions that the veteran's treatment records
dated throughout the months immediately prior to and
following his designation are insufficient to show that he
lacked testamentary capacity when he made the beneficiary
change on June 16, 1997.
4. Undue influence
The veteran's daughter's has also argued that the appellant
used undue influence in order to induce the veteran to
designate her as the beneficiary of his NSLI policy.
However, it is unclear precisely what the nature of the
alleged undue influence was. The most specific argument that
the Board can identify was actually set forth by the attorney
for the veteran's estate, who asserted that the appellant
might have used force in order to get him to change the
designation. However, it is not clear what force may have
been used, as no specific description of such force was set
forth by the attorney, and no evidence was provided in
support of that assertion. With respect to the daughter's
assertion of undue influence, it appears that she has
essentially argued that the appellant is a dishonest person,
who has committed fraud in the past, and that she therefore
must have used undue influence in this instance. She has
submitted various pieces of evidence in support of this
argument, such as the statement from the appellant's sister,
G., and several documents, which purport to show that the
appellant has used her deceased sister's name in order to
fraudulently obtain an automobile and other items.
As discussed above, before the veteran's designation can be
set aside on the grounds of undue influence, the daughter
must prove (1) the existence and exertion of an influence;
(2) the effect and operation of such influence so as to
subvert or overpower the mind of the testator at the time of
the execution of the testament; and (3) the execution of the
testament which the maker thereof would not have executed
except for such influence. See Lyle, supra.
Having reviewed the record, the Board finds that daughter's
assertion that the veteran's designation in favor of the
appellant was ineffective because it was the product of undue
influence or some fraud is not demonstrated by any objective
evidence of record. Clearly, while the veteran had
diminished capacity, there is no clear indication that, in
fact, the appellant exerted influence over the veteran, or
that the veteran's will was overpowered by her. Moreover,
while the appellant may have had the opportunity to exert
undue influence, a mere allegation is not sufficient proof
that undue influence or fraud was actually performed in this
case. Although there is no clear indication why the veteran
chose not to name either of his daughters in his designation,
that fact does not constitute proof of undue influence.
Similarly, although the daughter has submitted a great deal
of evidence for the purpose of showing that the appellant has
acted dishonestly and committed fraud in the past, these
facts also fail to show that the appellant actually exerted
any undue influence in this case. The daughter has not
asserted that she has any specific knowledge surrounding the
circumstances of this event, and she has not even stated in
what way the appellant exercised undue influence. Instead,
she has merely pointed out other instances of alleged fraud
and dishonesty in order to show that the appellant is someone
of bad character, and that undue influence must have occurred
in this case. However, such evidence fails to provide any
additional knowledge regarding the specific events
surrounding the designation, and thus, does not show that any
undue influence was exercised on the veteran, or that someone
else was controlling his will, at the time that he designated
the appellant as his beneficiary.
In this case, the evidence of record regarding the issue of
undue influence appears to consist primarily of opposing
views as to the appellant's relationship to the veteran. For
example, the veteran's daughter and G. have painted a very
unflattering picture of this relationship, by asserting that
the appellant was merely using the veteran's health problems
in order to take advantage of him. On the other hand, the
appellant, T., and her two neighbors have painted a virtually
opposite picture, by asserting that she acted as the
veteran's caregiver in his final days, and that her
designation was his way of thanking her for her assistance.
However, notwithstanding these arguments, the burden of
showing undue influence in this case rests on the veteran's
daughter, as the one challenging the designation document
which is of record. As discussed in detail above, her
general assertions of undue influence, and her more specific
contentions regarding other incidents of fraud in the
appellant's past, are insufficient to show that any undue
influence was in fact exercised in this case.
5. Conclusion
In summary, the Board finds that the appellant is entitled to
the proceeds of the veteran's NSLI policy. The Board finds
that the veteran signed the beneficiary designation form in
June 16,1997, and that the veteran's daughter has not shown
that he lacked testamentary capacity at the time of the June
1997 designation, or that he was subject to undue influence
or fraud at that time. Thus, the benefit sought on appeal is
granted.
ORDER
The appellant's claim of entitlement to the proceeds of the
veteran's National Service Life Insurance policy is granted.
This decision constitutes the final administrative denial as
to the contesting claimant.
ANDREW J. MULLEN
Member, Board of Veterans' Appeals